Crypto exchange Binance pulls out of FTX rescue deal
A day after announcing FTX rescue deal, Binance says it is backing out due to findings in corporate due diligence. Sequoia Capital also wrote down the full value of $214 million invested in FTX.
, the biggest crypto currency exchange by trading volume, has pulled out of a deal to bail out rival FTX.
The company took to Twitter to make the decision official. "As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com," Binance said in a tweet.
This development comes only a day after Binance announced the acquisition. The crypto exchange's billionaire CEO, Changpeng Zhao, had said the company would conduct a full due diligence on in the coming days. However, the two signed a non-binding LOI, which meant Binance could withdraw from the deal at any time.
The crypto market has been suffering from lack of customer trust and cash crunch since before the pandemic.
After Binance's announcement, Sequoia Capital, which invested $214 million in FTX last year, wrote down the entire value of its holdings in the Bahamian crypto exchange.
In a note, the California-founded investment firm said it does not take their investment responsibilities lightly and does extensive due diligence on every investment.
Sequoia's stance signals the venture capital firm cannot see a clear path to recoup its investment from the cryptocurrency exchange.
Edited by Teja Lele